Parking firm would make more money on pay-by-cell plan

Ald. Brendan Reilly, 42nd, is one of the aldermen most affected by the parking meter deal and answered questions Wednesday at City Hall. (Nancy Stone, Chicago Tribune)

Chicago's private parking meter operator could make $2 million per year in new convenience fees on top of investing the deposits made by drivers who pay by phone, under one new aspect of a complicated agreement Mayor Rahm Emanuel presented Wednesday to the City Council.

Chicago Parking Meters LLC would also get back nearly 1,000 lucrative Loop parking spaces that the city took over in December as part of Emanuel's long-running dispute with the firm that holds the much-maligned 75-year parking meter lease.

The mayor pitched the agreement as the best he could do to fix the "rotten deal" former Mayor Richard Daley made in 2008. He gave the City Council a month to consider the massive new contract and revised parking ordinance before a vote, saying that will be enough time for aldermen and the public to decide whether he made the right decision.

Emanuel said his deal would save at least some of the $103.9 million in exorbitant penalties the company sought under the contract, saying taxpayers would no longer be treated "as suckers and dumb money" for the firm. But the mayor dodged repeated questions about the details, including how he could assure taxpayers and aldermen that it was a good deal to get free Sunday parking in city neighborhoods in return for longer hours at meters across the city.

"They'll evaluate that in the same way that they'll also see the value of what pay-by-cell is," Emanuel said of taxpayers. "That's what their job is."

Under the deal first announced last week, meters would be free on Sunday anywhere outside of the central part of the city, and more than two-thirds of the parking meters would have their operating hours extended from 9 to 10 p.m. Monday through Saturday. Meters in the River North neighborhood would continue to operate seven days per week, but would be extended three hours from 9 p.m. until midnight.

Ald. Brendan Reilly, 42nd, who represents River North, said the city should handle the dispute over penalties separately from any other changes to the contract.

"I think we should dispense with the idea of Sunday parking and extending hours. That complicates things," Reilly said. "It's all cooked into a settlement that we have to vote on, and if you have certain concerns with this settlement, you should vote no."

Ald. John Arena, 45th, agreed, saying it is unclear how the deal will benefit the parking firm.

"Where is the analysis of, 'Will that produce more revenue for them?'" Arena said of extending meter hours. "So far, I've been told they come as a package, but that's not the final word as far as I'm concerned."

Officials for Chicago Parking Meters declined to provide details about how much they might make from the agreement.

Under the agreement, the city would swap more than 1,800 parking spaces — including nearly 1,000 in the Loop — in return for 17 parking lots with 1,100 spaces currently operated by the parking firm. The mayor's office did not provide the section of the agreement that details the locations of those spaces, but a spokeswoman for the mayor said they are outside the Loop.

Emanuel said another positive aspect of the plan would be the new ability for drivers to pay for parking with their cellphones, as they can in other major cities. But some details of that plan were likewise unclear.

Chicago Parking Meters would be able to charge a 35-cent convenience fee for phone purchases for parking under two hours. That fee would be allowed to increase annually with the cost of inflation, according to the deal. The firm would be allowed to collect up to $2 million per year in convenience fees, with anything more than that being paid to the city, under the agreement.

What's less clear is how much the company could profit by investing the money placed by drivers into prepaid accounts. To pay by cell, each driver would have to open an account with a minimum of $20, and it would be replenished automatically when it drops below $10. The company operates about 36,000 parking spaces.

Thom Serafin, a spokesman for Chicago Parking Meters, said the company had no estimates for how many Chicago drivers might use the program or how much it might earn in interest by investing the balance of those accounts. Serafin said drivers could renew their parking fees when meters expired without returning to the kiosk.